Law Times

Page 4 May 14, 2018 • Law TiMes www.lawtimesnews.com NEWS NEWS NEWS duty of care, especially in light of the Supreme Court's decision in Livent, says Vermette. In the case of Maple Leaf and the Mr. Sub franchisees, she says, the Court of Appeal also examined the undertakings of the food distributor and the reli- ance of the store owners. "It cannot be broader than what was undertaken. Maple Leaf did not undertake to pro- tect the reputations of the fran- chisees," says Vermette. The fact that no customer of the franchise fell ill as a re- sult of the outbreak was also significant. "The result of this case might have been different if a Mr. Sub customer had been harmed," she adds. Vermette notes that, while it was in obiter, the Court of Ap- peal suggested a policy reason for restricting the scope of the duty of care in this type of situ- ation to encourage companies to go forward with recalls without being concerned about expand- ed liability. "To the extent that the fran- chisees' alleged damages relate to the recall itself, policy con- siderations call into question imposing liability," the Court of Appeal wrote. "There is a strong public in- terest in encouraging manu- facturers to act expeditiously in recalling products from the marketplace to avoid potential danger to consumers." LT Elizabeth Bowker, co-counsel for Maple Leaf, says the ruling is good news for food producers. "Typically, you would owe a duty to the end customer, not to every entity in the supply chain," says Bowker, a partner at Stieber Ber- lach LLP in Toronto. Maple Leaf was an exclusive meat supplier to Mr. Sub when the outbreak was discovered. There is no evidence that any customer of the submarine sandwich chain was harmed. The class action, certified by Superior Court Justice Lynne Leitch, is based on alleged eco- nomic losses. In a subsequent summary judgment motion, which was the basis of the appeal, Leitch found that the tainted meat "posed foreseeable, real and substantial danger to consumers' health and safety" and, as a result, the economic losses of the franchise owners are recoverable. "Policy considerations weigh in favour of imposing a duty in these circumstances to heighten accountability," Leitch concluded. The Court of Appeal dis- agreed. It stated in its ruling that the duty of care extended only to the actual customers. "The franchisees cannot bootstrap their claim for dam- ages for reputational loss to the different duty owed by Maple Leaf to their customers," wrote Fairburn. The fact that Mr. Sub was named in media reports after the outbreak as a recipient of poten- tially tainted Maple Leaf prod- ucts does not mean it should be liable for how customers react to the coverage, says Bowker. "There is no duty at large to protect someone's reputation," she explains. The Court of Appeal is trying to bring "rigour" to the duty of care analysis, says Marie-Andrée Vermette, chairwoman of the commercial practice litigation group at WeirFoulds LLP in To- ronto. "You may have some form of duty, but what is it exactly? Where does it start and where does it end?" asks Vermette. In its decision, the Court of Appeal is "highlighting" the need to engage in this level of analysis to define the scope of a ciation but was independent of the OBA — said that its review would take into account the principles articulated by the Supreme Court of Canada in its decisions regarding taking the background of Indigenous people into account in both R. v. Gladue and R. v. Ipeelee. Schabas said that when he first read the motion, he felt it was something the law society should be doing as part of its broader review of how it deals with Indigenous issues and rac- ism. To that end, Schabas ap- proached the working group to thank the members for bringing it to the LSO's attention and in- dicated that the LSO would take it on. "We had a discussion with them about the things we intend to do and, as a result of that, I was pleased that they agreed to withdraw the motion because it's not necessary," says Schabas. David McRobert, a Peter- borough, Ont. lawyer who was part of the working group and who spoke on its behalf when withdrawing the motion, says he suspects the treasurer didn't want to see a messy debate about the motion at the AGM and felt that it was simply about doing the right thing. "In good faith, they say they're going to look into it, and we applaud them for it," says McRobert. Schabas expects a prelimi- nary report to be ready for the LSO's Convocation in the fall. "They're going to take a look at the impact of the good char- acter requirement, how it has been applied and how it applies to Indigenous people and other people to en sure that there's not an unfair barrier there, and to come forward with recom- mendations as to what might be needed to change that if there are concerns," says Schabas. Schabas notes that, to date, the LSO has passed an Indig- enous framework to examine all of its work through an Indig- enous lens, and that the advi- sory group is active, containing elders and Indigenous lawyers who give advice across the full range of activities they do. Schabas also noted that there is a review panel to look at how Indigenous issues and Indig- enous complainants are dealt with as part of their complaints and discipline process to ensure that they are addressing them in an effective and culturally com- petent way. "We've retained Ovide Mer- credi, who is a well-known for- mer Grand Chief of the Assem- bly of First Nations, to give us advice as well on those issues," Schabas says. "We're doing a lot, and we're open to any other issues that people want to bring to our at- tention." Schabas also noted that, on May 22, in partnership with the Indigenous Bar Association and The Advocates' Society, the LSO will launch a guide for law- yers to help them understand and become more culturally at- tuned to issues when represent- ing Indigenous clients. "From our point of view, it's a win," says McRobert. "We really have achieved most of what we sought to do. There's always a risk when these things are put to the AGM that these things could be voted down, in which case we'll have raised the issue and people will be aware of it, but it won't nec- essarily proceed further than that." McRobert says that, this way, there is a degree of certainty around the fact that the LSO will proceed quickly. "Overall, the working group was pleased." Emily Hill, the interim legal advocacy director for Aborigi- nal Legal Services, says she is supportive of the fact that the LSO is taking on the issue. "Often, lawyers' first instinct is to argue and litigate, but it seems like people are taking a collaborative approach, which is positive," says Hill. She says it now falls on the law society to turn the work that's been done so far by the working group and put it into action. LT Motion set for AGM withdrawn Continued from page 1 Continued from page 1 Class action launched by franchisees after outbreak A legal classic for your bankruptcy and insolvency practice Always up to date – two editions a year The Annotated Bankruptcy and Insolvency Act continues to be the resource you can rely on for authoritative guidance and current law and policy at a moment's notice. This practical softcover is a condensed version of the fi ve- volume classic Bankruptcy and Insolvency Law of Canada, 4th Edition. 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Price(s) subject to change without notice and subject to applicable taxes. © 2018 Thomson Reuters Canada Limited 00251FB-A92285-CM Always up to date – two editions a year The Annotated Bankruptcy and Insolvency Act to be the resource you can rely on for authoritative guidance and current law and policy at a moment's notice. This practical softcover is a condensed version of the fi ve- volume classic 4th Edition In good faith, they say they're going to look into it, and we applaud them for it David McRobert

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